- The Korea Composite Stock Price Index surged by 4.28% on Friday, primarily driven by a strong rebound in chip giants Samsung Electronics and SK Hynix. However, due to the global tech stocks' plunge amid concerns over the peak of artificial intelligence, the weekly index still recorded a cumulative decline of nearly 5%.
- Despite a significant intraday recovery in major equity indices, foreign investors continued their net selling trend in the Korean stock market, with a net sell-off exceeding 150 billion won on the day. This indicates that overseas asset management institutions remain in a defensive portfolio adjustment phase amid significant market volatility.
- In the foreign exchange and bond markets, the Korean won weakened against the US dollar, with both onshore and offshore rates falling to around 1,544. Meanwhile, the yields on Korea's benchmark three-year and ten-year government bonds fell moderately, indicating a relatively loose liquidity condition in the fixed income market.
Tech Heavyweights Propel Intraday Index Rebound
After a significant correction in global tech stocks, the Korea Composite Stock Price Index experienced a systemic rebound on Friday, surging 327.43 points to close at 7,975.52 points. Among the index's heavyweight stocks, chip manufacturing giant Samsung Electronics closed up 8.57%, while SK Hynix climbed 7.18%. Additionally, Hyundai Motor and Kia Motors recorded gains of 0.41% and 3.17%, respectively. Despite more stocks rising than falling intraday, the KOSPI index still faced a weekly cumulative decline of 4.95% due to a concentrated sell-off in the artificial intelligence sector earlier in the week, posing pressure for a second consecutive weekly decline.
Continued Foreign Outflows and Noticeable Stock Divergence
Despite strong intraday gains in major chip and automotive heavyweight stocks, the overall capital flow in the Korean market remained cautious. Foreign investors continued to sell off in the Korean composite index market, recording a net sell-off of 150.19 billion won for the day. Among the 912 tradable stocks, 406 stocks rose, while 471 stocks fell, showing a clear divergence where index heavyweight stocks led the rise, but most small and mid-cap stocks struggled to follow or adjusted against the trend. This indicates that after high volatility, the market's risk appetite has not fully recovered.
Currency Market Under Pressure as Won Closes Lower Against Dollar
The strong rebound in the equity market failed to boost the performance of the Korean currency. The won weakened against the dollar during today's trading, closing at 1,544.4 on the domestic settlement platform, down 0.28% from the previous day's official closing price of 1,540.0. Meanwhile, the offshore market saw the won fall by 0.3% to 1,544.5, with the one-month non-deliverable forward (NDF) rate hovering around 1,543.2. The continued pressure on the exchange rate is mainly due to the repricing of global tech trades and the marginal impact of continued foreign portfolio outflows.
Stable Bond Market with Benchmark Yields Declining Across the Board
Unlike the weakening currency market, Korea's fixed income market remained relatively stable today, with benchmark government bond yields declining moderately across the board. The yield on the most liquid three-year Korean government bond fell by 1.5 basis points to 3.732%, while the benchmark ten-year bond yield edged down by 0.7 basis points to close at 4.173%. Additionally, the three-year bond September futures contract rose slightly by 0.08 points to 103.11. The decline in bond yields reflects an increased demand for long-term certainty assets by safe-haven funds amid rising macroeconomic uncertainty triggered by the revaluation of global tech stocks.
